Do you pay a nanny straight cash or do I need to file a 1099 for her?

Throwout said:

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Before we can answer accurately, compliance with rule #1 is required.

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I obviously haven't hired the nanny yet.

Mtn_Guide said:

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Do you pay a nanny straight cash or do I need to file a 1099 for her?

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1099's are issued by those in business, not personally. You do not issue a 1099 to a carpenter, a plumber, someone mowing your yard, or a nanny.

As someone else mentioned, the nanny is a household employee and should be issued a W-2 and you would be responsible for doing so as well as filing quarterly reports with the Texas Workforce Commission.

Above posts are accurate. Now, I'd like to bet that most don't do the by the book method.

Members of Congress definitely don't.

Man, I would be careful skirting the law on a nanny. There are more specific rules on having "household" employees. A full-time nanny, groundskeeper, live-in maid, etc fall into this - and yes they should be W2-ed.

I would not be paying a nanny in cash. If they are a regular, but part time watch the kids deal, thats a babysitter and cash is the gray area you get into when the lawn guys asks for his last 3 months of service in cash vs check.

You placing your kids lives in their hands, typically as much if not more day time then you spend with them, and usually for a number of years if if works out. I would do it straight-up by the books. And the nanny should be expecting the same.

Matsui said:

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Above posts are accurate. Now, I'd like to bet that most don't do the by the book method.

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You are correct. In fact, I think the compliance was greater 10 or 15 years ago than it is now. The one I see most often is for "sitters" who tend to the elderly. They come to the home of the elderly person, cook, clean, wait on the older person. It often takes 3 to 4 of them so that someone is there most of the day. When the family member (son or daughter most of the time) tries to find the sitters, if they mention taking out taxes/giving them a W-2, they flat out do not want the job. And many of them want cash only. I bet a large percentage of them are on some sort of disability and want the money but want to be off the radar so to speak. So the family member is faced with the choice of doing it right but it being almost impossible to find the workers, or doing it incorrectly but having little difficulty in finding them. I have seen several instances where this ran $40,000 to $60,000 per year, and the last one I saw (now in year 3 of this) they were paying out like $109,000 or $119,000 (I forget which) per year. That situation is where there is 24 hour coverage.

flown-the-coop said:

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Man, I would be careful skirting the law on a nanny. There are more specific rules on having "household" employees. A full-time nanny, groundskeeper, live-in maid, etc fall into this - and yes they should be W2-ed.

I would not be paying a nanny in cash. If they are a regular, but part time watch the kids deal, thats a babysitter and cash is the gray area you get into when the lawn guys asks for his last 3 months of service in cash vs check.

You placing your kids lives in their hands, typically as much if not more day time then you spend with them, and usually for a number of years if if works out. I would do it straight-up by the books. And the nanny should be expecting the same.

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Correct. Have seen three or four horror stories where it was done incorrectly. What can happen is the nanny (or other household employee) gets terminated and files for unemployment but there is no record of her (or him, but almost always a her) having being employed. Becomes a really bad day.

Yikes

30wedge said:

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flown-the-coop said:

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Man, I would be careful skirting the law on a nanny. There are more specific rules on having "household" employees. A full-time nanny, groundskeeper, live-in maid, etc fall into this - and yes they should be W2-ed.

I would not be paying a nanny in cash. If they are a regular, but part time watch the kids deal, thats a babysitter and cash is the gray area you get into when the lawn guys asks for his last 3 months of service in cash vs check.

You placing your kids lives in their hands, typically as much if not more day time then you spend with them, and usually for a number of years if if works out. I would do it straight-up by the books. And the nanny should be expecting the same.

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Correct. Have seen three or four horror stories where it was done incorrectly. What can happen is the nanny (or other household employee) gets terminated and files for unemployment but there is no record of her (or him, but almost always a her) having being employed. Becomes a really bad day.

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Don't stop at the unemployment. Very likely she could have worked over 40 hours a week. Guess what, she gets herself deemed an employee and you are paying her that too.

Side note to be careful employees vs 1099 workers. Know the rules, follow them, usually think to stay well on the safe line here. Ask Uber and Lyft how this is working out for them right now.

We had one for a year. I didn't want to keep track of daily hours and overtime, or pay differing amounts every week so we basically offered her the job as a salary for 40 hrs a week earning $12/hr and 10 hrs a week earning $18/hr. Gave her 10 vacation days and off any time we took off and still paid her the same every week with the understanding that sometimes she'd work more hours (I'd say we had to work late) and sometimes she'd get the benefit of being paid while we were on vacation. We informed our accountant and she handled all the tax forms and calculated the amount we should pay her weekly with her taxes taken out. Honestly it was great knowing that I wasn't doing anything illegal or having to worry about later repercussions of that. Would do again

What if it's a family member (ex grandma) watching the baby in your own home? Isn't there some rule about whether or not it's a family member and whether or not it's at your house or theirs? Asking for a friend.